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Chapter 04, Problem 020 Parker County Community College (PCCC) is trying to determine whether to use no insulation or to use insulation that is either

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Chapter 04, Problem 020 Parker County Community College (PCCC) is trying to determine whether to use no insulation or to use insulation that is either 1 inch thick or 2 inches thick on its steam pipes. The heat loss from the pipes without insulation is expected to cost $1.20 per year per foot of pipe. A 1-inch thick insulated covering will eliminate 76 % of the loss and will cost $0.25 per foot. A 2-inch thick insulated covering will eliminate 92 % of the loss and will cost $0.95 per foot. PCCC Physical Plant Services estimates that there are 200,000 feet of steam pipe on campus. The PCCC Accounting Office requires a 13.0 %/year return to justify capital expenditures. The insulation has a life expectancy of 10 years. Click here to access the TVM Factor Table Calculator What is the present worth of each option? No insulation: $ 1-inch insulation: $ 2-inch insulation: $ Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is +20. Which insulation (if any) should be purchased using a ranking present worth analysis? Click if you would like to Show Work for this question: Open Show Work

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